Mr. Hammond: The Minister says that he does—probably on the back of a fag packet in the Red Lion on a Friday night. As a rigorous economic analysis of the costs and benefits of legislation, a piece of paper telling us that the benefit to be derived from increased productivity will be between £23 million and £146 million should be treated with the utmost scepticism, if not contempt. Producing figures that woolly is a waste of everyone's time.

I am tempted to think that this is regulation for regulation's sake, which may result in an own goal for those whom it affects. With the exception of the repeat contract issue, which is an abuse, there seems to be little case for the measure. In the Financial Times on 25 May, the Minister said:

''I think you would have to struggle to look around and find an area where workers don't have minimum standards and a basic safety net . . . So, there is a need now to concentrate on increasing employment, tackling social exclusion and spreading best practice.''

The regulations address a problem that, from his own figures and the evidence of his comments to the Financial Times, does not really exist.

The Minister runs the risk of damaging employment prospects and reducing good practice by imposing heavy-handed legislation, which will not increase employment and will damage the position of many fixed-term workers who are well remunerated compared with their permanent counterparts in the workplace. There seems to be a hidden agenda. I do not accuse the Minister of having a hidden agenda, but I accuse those who are pressing for the provisions. All atypical workers, of which fixed-term workers are a sub-group, are less susceptible to unionisation.

Column Number: 014

The Chairman: Order. It would be preferable if the hon. Gentleman stuck to the agenda that we are supposed to be discussing.

''the inclusion of . . . the proposals can be seen as a significant victory for the TUC and union position.''

I am simply drawing attention to the fact that that is a perfectly rational position for the TUC to take, and I do not blame it for taking that position. If I were in the business of recruiting members to a trade union, I would urge the Government to reduce atypical work and force as many people as possible into conventional work patterns in which they might be more easily unionised. I invite the Committee to draw its own conclusions from that observation.

The Chartered Institute of Personnel says that

''although there may be abuses at the bottom end of the employment curve, at the top end there are many people working on fixed-term contracts whose employers would love to get them on permanent long-term contracts, but are unable to do so. It is their choice to work on fixed-term contracts.''

The legislation seems not to recognise that, and it is likely to be detrimental to those people.

I have a few specific questions for the Minister. First, on transitional arrangements, how will he protect employers whose contracts with their workers are predicated on an agreement to forgo certain benefits that would have been made available to a permanent employee and to monetise those benefits in the form of higher remuneration? How is the employer to deal with the obligation to include the package of non-monetary benefits available to the comparable permanent employee while continuing to pay the premium rates of cash remuneration provided for in the contract, which were originally introduced to recognise the fact that that employee would not be entitled to those benefits?

Will the Minister confirm the position of a fixed-term worker who becomes entitled to statutory leave during, but just before the end, of the term? For example, an employer might take on a fixed-term worker to cover maternity leave for nine months and, seven months in, that fixed-term worker might notify the employer that she was pregnant and entitled to statutory maternity leave. Would the contract still end after nine months, or would the employer be unable to terminate it then because statutory maternity leave was in force? I believe that it would be, prima facie, an unfair dismissal to dismiss someone who is on statutory maternity leave, but I would be grateful for the Minister's clarification.

A couple of issues arise from the regulations. Regulation 5 refers to the following circumstances:

''If an employee who considers that his employer may have treated him in a manner which infringes a right conferred on him by regulation 3 requests in writing from his employer a written statement giving particulars of the reason for the treatment''.

So, an employee can ask his employer to state in writing the reason for his allegedly unfair or non-comparable treatment to assess whether it is permitted

Column Number: 015

on objective grounds. I see no requirement there for the employee to set out in that written request to the employer the unfair treatment of which he complains. Therefore, the employer could be left facing a fishing expedition. Is not an employer who receives a note from an employee saying, ''I believe that I am being treated unfairly; I require a statement in writing of why you are treating me thus,'' entitled in equity to a statement of the specific unfair treatment complained of?

In regulation 7(5), I am not sure whether we move from the sublime to the ridiculous or whether the measure remains sublime. However, it is a good example of what happens when a British parliamentary draftsman gets to work on Brussels-ese. It says that

''a person shall be taken for the purposes of paragraph (4)(b) to decide not to act—

(a) when he does an act inconsistent with doing the failed act; or

(b) if he has done no such inconsistent act, when the period expires within which he might reasonably have been expected to have done the failed act if it was to be done.''

I read that about 20 times this morning and it says not a single thing to me. Has the Minister a clue as to what it all means and can he tell us what we are to make of it? We should remember that employers have between now and 1 October to work out what it means for them, in addition to all the other burdens that the Government have imposed, and to get to grips with it so as not to fall foul of the law.

I should also like to ask the Minister about regulation 12(1), which says:

''Anything done by a person in the course of his employment shall be treated for the purposes of these Regulations as also done by his employer, whether or not it was done with the employer's knowledge or approval.''

That is a remarkable and disconcerting principle. Regulation 12(2) says:

''Anything done by a person as agent for the employer with the authority of the employer shall be treated for the purposes of these Regulations as also done by the employer.''

Fair enough; I would expect that. However, in regulation 12(1), the Minister is introducing a provision that says that anything an employee does in the course of his employment is to be treated as being done by the employer as well. Is that a departure, or can he cite legislative examples in which anything done by an employee, whether or not as agent for his employer, is to be treated as done by the employer at the same time?

We discussed this matter last Wednesday in relation to temporary workers, although it might have been in relation to something else—we have had so many debates in the past week that I cannot be certain which. I want to test the Minister on the subject of application to the armed forces. Conservative Members typically support the call to exclude the armed forces from the scope of employment legislation, as they are different and different imperatives apply to them. However, it is disingenuous of the Government always to find a case, whatever wrong needs righting and whatever ill

Column Number: 016

needs addressing, for excluding some group of employees in their own service—in this case, military personnel.

Why should officers on short-service contracts not have the same rights as the Minister proposes to give to other employees on fixed-term contracts? My hon. Friend the Member for Blaby (Mr. Robathan) will no doubt correct me if I suggest the wrong figure, but why should the Government exclude seven-year or four-year—

Mr. Andrew Robathan (Blaby): Fifteen years.

Mr. Hammond: My hon. Friend suggests 15-year fixed-term contracts. Why should such contracts be excluded from the scope of the regulations? Clearly, a 15-year fixed-term contract properly has the nature of permanent employment. It is obvious that the armed forces must be excluded from much employment legislation because of the operational nature of their job, but it is not clear that fixed-term service contracts in the armed forces necessarily need to be treated differently from those in the civilian world.

That brings me to the end of the issues that I want to raise with the Minister. I hope that he takes the trouble to respond to my specific points in replying to the Committee.

5.26 pm

Brian Cotter (Weston-super-Mare): I shall make a brief contribution, concentrating on the general implementation and impact of the regulations. I agree with the hon. Member for Runnymede and Weybridge (Mr. Hammond) on the importance of regulatory impact assessments. I have raised the issue on many occasions in my five years in Parliament. With the early Bills in my time here, it was often noticeable how poorly the impact assessment had been carried out. I hope that the Minister can assure us that the assessment has been done well on this occasion, because the matter is so vital for business and all those involved with the regulations.

It is not unreasonable to expect that there should be a report on regulations after a certain period. The Liberal Democrats have asked for that on a yearly basis, so that we can examine the impact of regulation on businesses, especially small businesses. There should be an annual assessment of the effect of regulations and—although it may not be relevant in this case—the implementation of sunset clauses.

The regulations come into force in October. A previous set of regulations under the working time directive came into force at a similar time of year, and many in business were not aware of those regulations and did not realise that they would have an impact on them. I seem to remember that explanations were issued to firms a week or so before the regulations came into force. Whether I am right about those regulations or not, I know that there has been a similar instance of legislation debated in July and brought into force in October, when businesses were not made fully aware of what was to come.

The Government have assured us that the Small Business Service will play a key part on such issues, so will the Minister say whether the Small Business

Column Number: 017

Service will be involved in this case. For example, will the Small Business Council be involved in ensuring that the implementation of the regulations is satisfactorily conducted? I look forward to hearing what the Minister has to say about those important questions of red tape and bureaucracy affecting business.